Germany – Car Insurance
Car insurance (KFZ Versicherung) can vary from one company to another, but there are basically three car insurance options:
- motor liability insurance (Kraftfahrzeug-Haftpflicht-Versicherung)
- partial coverage (Teilkasko)
- comprehensive (Vollkasko)
To lower your insurance premium you need a letter from your previous insurer listing prior claims (or lack thereof!) and/or a driver insurance rating. Without anything written, you will be rated as a beginner. Beginners represent a higher risk for insurance companies and are rated with 125%.
Insurance rates depend on your car’s brand name, model, how many miles per year you drive, if you have a garage etc. Quite important is your driving history. Every year without an accident will get you a rebate. If you were involved in an accident which was not your fault, it does not count since you did not cause any cost to your insurance. If you have had an accident, your premium might be a little more expensive, but not as expensive as a beginner’s.
After that the so-called 100% rate starts. For every “good year” (without any accident caused by you) you drop in this percent-rating.
After one year it is 85%, after two years you pay 70%. For each following “good year” you drop by 5% until you reach the rate of 30%, which is the lowest.
Expat Tip: Prior to leaving a country, always ask your car insurance for a certificate of your claim record. It may be needed in the country you are moving to.
Motor Liability Insurance (Kraftfahrzeug-Haftpflicht-Versicherung)
Cars cannot be registered unless you have taken out mandatory third party insurance (Kraftfahrzeug-Haftpflicht-Versicherung).
Mandatory coverage costs about 600 euros per year per vehicle, depending on the type of vehicle.
The minimum sum you are legally required to be insured for is: 2.5 million euros for personal injury (or 7.5 million if several people are injured), half a million euros for damage to property and fifty thousand euros for financial loss.
Before registering the car, request a Doppelkarte (double card) and insurance application form from your chosen insurance agent. The Doppelkarte must be taken with you when registering the car. After the car is registered, send the completed application form, a copy of the car registration certificate Fahrzeugschein, a letter from your previous insurer and a copy of your driving licence to the agent. Then they’ll send you a bill and a very long document outlining the terms and conditions of your insurance.
An important word to look out for in this document is Selbstbeteiligung, meaning excess, which is the amount you have to pay yourself in the event of a claim before your insurance kicks in to cover the rest of the costs.
Partial Coverage (Teilkasko)
One step up from Kraftfahrzeug-Haftpflicht-Versicherung is partial coverage: Teilkasko.
Teilkasko covers damage to your own vehicle through fire, scorching, theft, storm, hail and lightning. Breakage to glass and damage caused by a collision with red, black or hoofed game animals is also covered, as is damage to cables or hoses caused by cute little furry gremlins called “Marder”. Teilkasko costs almost as much as Kraftfahrzeug-Haftpflicht-Versicherung.
The top insurance coverage you can take out is comprehensive insurance: Vollkasko.
Vollkasko covers all the above as well as damage to your own vehicle in an accident or damaged caused by third party persons.
There are many additional facets to comprehensive insurance including:
- Insurance for legal expenses (the cost of legal advice and legal action)
- Passengers’ accident insurance (covering passengers’ or driver’s health if the driver has acted negligently)
- Theft of luggage (provided the luggage is stolen from within the car)
All insurance may be nullified if you drive without a permit, drive an unroadworthy vehicle, drive whilst drunk or you intentionally cause the damage. You should also check if your insurance covers you outside Germany.
Car insurance in Germany
Once you’ve set yourself to buying a new ride, it is time to think about your car insurance in Germany. That step is really important because you can’t even register your car without a valid policy number. There are a few things to consider and the rules might be different from what you know from back home. I recently bought my first car (a Peugeot 308 if you must know, go ze french! 🙂 ), so i thought i would share my experience here in the form of a mini-guide.
A little guide to your car insurance in Germany
You will find that german car insurance policies (also known as Kfz Versicherungen) are split between 3 types :
Haftpflicht – Liability or third-party coverage
This type of car insurance is minimum legal requirement to be able to register your car. It covers all the damages you and your car might do to other people, other cars or things in case of an accident. It also covers their medical bills too for example. It does not cover damages made to your car if it was your responsibility.
Teilkasko – Partial coverage
This includes Haftpflicht & covers all sort of other random risks that life can sometimes throw at you such as damages from theft-attempts or theft attempts themselves, fire, glass damages, thunderstorms, things like that. Vandalism is not covered.
Vollkasko – Comprehensive coverage
This type of insurance has all the guarantees of the Teilkasko & Haftpflicht policies, and adds on top a coverage for all damages made on your own car or yourself in the case of an accident. Your insurance company gives money to the person’s car you wrecked AND it gives you money to fix/replace on your own car as well, even if the accident was your fault.
As you might suspect, since there are more liabilities, the policy will be more expensive. Some policies also cover permanent disability you might experience after a crash, or even the death of a passenger. If you buy a car with the help of a financing service from the dealership or from a bank, it might be required to sign-up for a Vollkasko to cover the risks.
In general, when you are looking for a car insurance in Germany for a newly-bought car, it is advised to go for a full coverage as you have put a lot of money to buy the car in the first place. You should try to protect its value. People who buy second-hand cars usually go with Teilkasko.
Factors impacting the costs
Now the criteria that will decide how much you will pay for your car insurance in Germany don’t differ much from what you might know:
- Driving experience / Age
- City vs country-side
- Previous insurance record
- Number of drivers
- Postal code: some areas are more vulnerable to crime/accidents/theft
- Value/model/size/power of the car: the bigger the car is, the more expensive it gets
- Driving distance: the more you drive in a year, the more it will cost you
Using your existing driving record
One of the first questions i had when looking for a car insurance in Germany was: “It is possible to transfer my good driving history to a german contract?“. I had been driving a few years prior without any accident, so it would have been a shame if i couldn’t enjoy a nice discount on the price i’d pay in Germany too. The answer is more often that not “Yes”. Simply ask your insurance company to write you an official-looking statement proving your good conduct. This helped to access a cheaper car insurance in Germany, only available to experienced drivers. It can save you hundred of euros a year.
Practical steps to sign up for a german car insurance contract online:
Now that you know the basics, you can go ahead and book a contract with a german car insurance company to obtain the eVB number (elektronische Versicherungsbestätigung – electronic insurance confirmation) you need to register your car. You can compare the most competitive offers on platforms like Preisvergleich.de or Verivox.de to get the cheapest rates available. Fill in your information to receive offers via email.
Here are some items you might need explanations for during that process:
- Saisonkennzeichen (usually, choose no): this is meant for people that only want to have a valid license plate for only part of the year like for a sea-side vehicle for example, resulting in a cheaper car insurance in Germany. Kennzeichen means licence plate
- Fahrzeugnutzung: state here if you plan to use it for private or professional reasons.
- Nächtlicher/Üblicher Stellplatz: state here where the car will usually be parked. A enclosed private garage will result in a cheaper rate.
- Teilnahme am Begleiteten Fahren: In some countries, you can learn to drive with accompanied practice, which usually leads to safer drivers. State here if you did do that.
- Fahrzeugkategorie – Kombi/Limousine/Cabrio: german names for station wagon/sedan/convertible.
- Punkte in Flensburg: the local equivalent of the point system managed by the Kraftfahrt Bundesamt, where you can lose points when driving recklessly on the road.
- Selbstbeteiligung: German name for the deductible, the small amount that comes out of your pocket when there is a claim. The higher the amount, the cheaper the rate will be.
(Let me know if there are other items you feel unsure about)
Once you have completed all your information, you are presented with the best offers that you can pick from to sign a contract. The whole process thereafter can be very quick and it can take less than 24 hours to receive your eVB number by email.
You can finally register your car, and a bit later drive off in your brand new ride to the tune of James Brown’s own “Papa’s got a brand new bag“.
Tip : Don’t forget that you can deduct some of the costs of your car insurance in Germany in taxes, when doing your tax return. Be sure to include it your Steuererklärung.
How Much Cost Insurance For Car In Germany
Still have a question? Ask your own!
In 2014, we bought a Mercedes CLA250 with European delivery. This program means that you purchase a car through your local US dealer just as you would if you were picking it up from the dealer. We got a 5% discount on the CLA off the US price. More expensive Mercedes cars received a higher percentage discount.
Once you close the deal, you will receive notification of when your car will be ready for pick up at the factory in Sindelfingen. You plan your trip accordingly. When you arrive in Stuttgart the night before, you check into a 5 star hotel paid for by Mercedes. The next morning, you take a taxi from the hotel to the Mercedes factory paid for with a voucher provided by Mercedes. You arrive and check in. This gives you access to the part of the building where people are waiting to pick up their cars. There are complimentary snacks, coffee and soft drinks available.
If you choose, you can go on a factory tour. We did and it was very interesting. We also received a voucher for lunch at the restaurant in the building same building.
When we picked up the car, had a technical specialist run us through the vehicle operations. After you are familiarized with your car, you drive out the door. As part of the European delivery program, Mercedes covers the insurance and registration costs for a period of time. At the end of this time, you drop off the car at any of the many drop off points in Europe. These drop off points arrange the ocean shipment to the US. When your car arrives in the US, you pick it up at your local dealer.
The European delivery program may have changed in the past 4 years, but this describes what was current in 2014. After US tax and title, we paid less than the US list price would have been.
Based on a comment, let me add another anecdote from this story. I was going to add this to the original answer, but I changed my mind.
On the drive from Bavaria to Berlin, we stopped to visit friends in Ingolstadt. They had a Mercedes that was few years old. They asked how much we paid, and I told them. They looked up the price on a comparable Mercedes CLA in Germany and found that the price was higher in Euros than what we had paid in dollars. The exchange rate in June 2014 was €1.00 = $1.36. This meant that we had paid $29,000 and to have bought the same car in Germany would have cost over $35,000 after receiving a rebate for the 19% Mehrwehrtsteuer. This did not include the cost that we would have incurred shipping the car to the west coast of the US.
The current price of a CL250 on the Mercedes-benz.de website is €38,437. This is $37,694 (excluding 19% Mehrwehrtsteuer) at today’s exchange rate of $1.167=€1.00. The CLA250 price on the mbusa.com website is $33,100.
This is not true. German cars in Germany are more expensive than their equivalent US cost in $USD. If you were to take the price in Euro of a Mercedes, convert to USD and try to charge that here in the US, they wouldn’t be selling very many cars. However, many of the European car companies have a “European Delivery Option” where you buy the car here in the US, but pick the car us (US spec) in Europe from the factory. You can drive it around Europe and then put it on a boat to the US. This is really just a “perk program” from the manufacturers to sell more cars.
The US-pricing being lower is also a reason that when you buy a car in the US, the dealerships may make you sign an agreement to not export the car from the US to other countries, since the manufacturer can levy penalties to dealers who knowingly sell cars for “gray market import” into another country. Here’s a link that talks about these restrictions to China:
I think several of the answers misunderstand the question. If the question is about buying a car built for the German market and then shipping that car to the US, then no it is not cheaper.
However, you can certainly buy a Mercedes built for the US market in Germany quite a bit cheaper than you can buy the same car at a US dealership. Mercedes gives you back 7% of the sticker, plus you do not have to pay the $1000 delivery and destination fee. Additionally, most dealers will discount the car even further by 1 to 2% so that ultimately, you can save as much as 10% on the car.
Obviously, the true savings depends on what you could buy the car for at a US dealership. This is a moving target depending on a number of factors, but I have not found a Mercedes dealer willing to discount 10% on a new car that you order to your exact specifications.
I have personally done this and can recommend Herbert Haemmer, a Mercedes salesman who has kind of made a niche for himself in this. He can help you order the car you want and then work with a dealer in your area for final delivery. The benefit of using Herbert is that he has much more experience at this than most dealers or sales people.
How Much Cost Insurance For Car In Germany
First of all let’s agree that one USD is roughly one Euro, so whenever I say Euro, you can take that amount in USD, too, you will be off by less than 10 percent.
Taxes depend on your engine size and your cars classification. The exhaust gas cleaning systems have to meet different standards. Diesel engines usually pay higher taxes than petrol engines. Actually with petrol engines standards from the 90s ate good for the lowest category, with diesel engines fue to their higher fine particle output even a five year old car might pay increased taxes. I don’t know the diesel taxes though. Modern petrol cars pay 13 Euro for 100ccm their engine completes. A displacement of 1990ccm means you will pay 19×13 Euro per year in taxes.
There are three kinds of insurance.
- General liability covering the costs of the opponent should I cause an accident. Coverage is usually up yo 100,000,000 Euro. Sound like a lot but there was a case where a driver caused an accident with a petrol delivery truck and that truck and it’s trailer fell down a highway bridge and the resulting petrol fire damaged the bridge so badly that it had to be closed for months and be partially rebuild. Imagine that bill if you would be covered to 1,000,000 Only. So this insurance is mandarory and id tou don’t pay the insurance will inform traffic administration and they will come to your house and revoke your cars registration by scratching if the seal of the licence plate. The amount you pay is based on the car and the years you drive without an accident. Conservative old peoples cars usually are cheaper than middle aged cheap cars that young kids buy to get their first driving experience. And sports cars are more expensive than sedans. You will also get a reduced grade every year you drive without am accident down to I think 30%. So you would pay only 30% of what you actually would have to pay for your kind of car. Only accisents that you pay by insurance are relevant. If you case minor damage and decide to pay it out of your pocket the insurance will not care and your rate will continue to go down.
- Teilkasko. No idea what it is called in English. It covers general dangers to your car like fire, theft, glas damage or damaged caused by accidents with wild animals. This insurance can be bought with or without co-pay.
- Vollkaslo: again no idea what that is in English. This insurance pays the repairs ofbyour car if you case an accident. Can also come with or without co-pay.
Petrol at the moment is around 1.35 Euro per liter, a little above 5 Euro(=5 USD) per US gallon. Diesel is around 1.05 Euro per liter or around 4 Euro per US gallon. Typical mid size European cars nowadays come with 1.4l petrol engines and use between 6 and 8 l/100km (30 to 40 mpg). So now you know why we do not buy cars with large engines but little turbo charged engines instead.
My car is a 1996 BMW 728i. It is in the cheapest tax class which means I have to pay 13 Euro for every completed 100ccm. As my engine size is 2790ccm, I have to pay 27×13 Euro =351 Euro taxes per year.
I have all three insurances. My general liability is at 35% at the moment for I have been not caused any accidents in recent years.
My Teilkasko is without co-pay. I think Teilkasko with co-pay is useless for I use it most often if there is a damage to my windscreen or lamps due to little stones. Having 500 Euro co-pay on an insurance that mostly covers damages of 300 to 800 Euro is rather useless.
My Vollkasko comes with a co-pay if 500 Euro.
So if I cause an accident I will get my car repaired bit have to pay 500 Euro out if my pocket or if the damages are too high I will get the current market price of my car minus 500 Euro.
In total I pay 720 Euro per year for my insurances. I do not know how much each of them is separately because I got them as a cheap package. If my general liability would be at 100% I would probably pay something around 1000 to 1100 Euro per year.
So in taxes and insurance I pay 1071 Euro per year plus petrol.